Put your AR On Auto-Pilot

e2b teknologies | 521 fifth avenue | chardon, oh 44024 | 440.352.4700 | www.e2btek.com

PUT YOUR SAGE ERP A/R ON AUTO PILOT TO REDUCE RECEIVABLES BY 20% IN JUST 6 MONTHS

January 23, 20121:00 PM to 2:00 PM EST

by James Mallory

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Small Businesses Still Face Credit Crunch




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The importance of A/R

Accounts Receivable is typically the largest or second largest asset for most businesses

Convert AR to cash faster and increase cash flow




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Late Payment is a Serious Problem




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http://www.atradius.us/images/stories/Payment%20Practices%20Barometer%20-%20Summer%202010%20US(1).pdf


True DSO compared to payment terms

Average Days Sales Outstanding (DSO) in the U.S. was 61 days.

Average Payment Terms were only 28 days.

That’s 33 days – almost a month past terms. You’re a business, not a bank. Stop financing your customers.Net 30 means Net 30 – not Net 60 or pay whenever you want to.

Source: atradius press release (9/30/10)





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Customers are asking for longer terms

52% of U.S. respondentsreported customers had asked for extended payment terms over the last six months.

Source: atradius press release (9/30/10)





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Late payment problems

26% of invoices 3 months old are uncollectable



The longer an invoice goes unpaid…

…the less likely that it will ever be paid.




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“In the past, ERP solutionshave been woefullyinadequate in terms ofcredit and collectionsfunctionality...”

(Source: PayStream Advisors)

The problem with traditional ERP




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Making Collections Easy

Who Handles Collections?

• Your Office Manager• Untrained Bookkeeper• Part-time AR Clerk• Your CFO or Controller• No One




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Small Company Cash Flow

Why Do Small, Medium, and Growing Companies Struggle With Cash Flow?

• No dedicated collections person• No Process• Don’t know how to collect• Don’t understand financial implications• No time




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Making Collections Easy

How Do You Handle Collections?

• Highlighter and Aging Report• Call in a favor from your brother-in-law Frank• Wait until you can’t make payroll and start dialing• Just send them to third party collections• Put ‘em on credit hold and hope they pay




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Automated Communications




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Putting Collections on Auto Pilot

• Send Reminders when Invoices will be due in 3 days• Send Past Due Notice the day after payment was due• Send Account Hold notices after 30 days past due• Mark for Third Party Collections after 30 days past due• Sell off to Factoring after 180 days past due• Escalate to management based on rules:• Amount past due in excess of $10,000• Days past due in excess of 15 days

• Schedule call for collector after 10 days past due• Change credit terms, credit limits, etc. after 3 broken promises

Anytime Collect is like CRM – document what you’ve doneAnytime Collect is not like CRM – what do you need to do

You will be more effective, save time, and improve cash flow




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Assign Tasks in Communications




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Tagged Invoices to Activities in Accounts Grid




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The business case

On average, businesses write-off 4% of Accounts Receivable

• That’s $400,000 for a $10 million company.

• A 10% improvement results in a $40,000 annual savings.

• Bad debt write-offs can be as high as 9% in some industries

• And some companies write-off much more than that!




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ROI

• As a result of automating collections, companies are realizing:• 10 to 20 percent reduction in DSO• 25 percent reduction in past due receivables• 15 to 25 percent reduction in bad debt reserves• increased productivity and ability to hold down staffing

costs• Costs of installing the collection software are recouped in

as little as two months and in usually no more than six to nine months.

PayStream Advisors, 2008




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ROI Calculation




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Demonstration




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Questions

Questions?

James [email protected]

440.352.4700 x229

mailto:[email protected]




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Put your AR On Auto-Pilot

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